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Study shows commissions significantly reduce mutual fund returns over decade
Research finds regular mutual fund commissions can reduce investor wealth by around 25% over ten years in most schemes.
Hidden distributor commissions in regular mutual fund plans have eroded about 25% of investor wealth over a 10 year period in roughly 80% of schemes. The data shows regular plans deliver lower returns than direct plans due to higher embedded costs, even when investing in the same assets. This highlights the importance of cost-aware plan selection for long-term investors.